Own a Rental Property? Get Ready for the Weaponization of Eminent Domain
In a recent article in rvivr.com, Kevin Boyd summarizes a bill in the Colorado State legislature (HB 1190) that would give local governments priority over private parties in purchasing multifamily properties. In essence, the owner of the property would be required to give the government a right of first refusal before selling to a private entity.
Along with freedom of speech, due process and equal protection, nothing is more important in establishing the superiority of the individual over the authority of the state than property rights. This tradition extends all the way back to the founding of our country. In 1790, John Adams said, “Property must be secured, or liberty cannot exist.”
At its core, the concept of property rights revolves around real estate above all else. The American Dream relies on the ability of a person of sufficient means to buy and sell real estate to whoever they choose, as long as the decision to sell is not based on appearance or sexual orientation. For over two centuries, property rights formed the basis for fair market exchange and has been confirmed through numerous legal precedents.
Prepare for an Abuse of Eminent Domain Laws
Eminent Domain is a legal concept rooted in the Fifth Amendment that essentially allows the government to seize private property against the owner’s wishes for projects that promote the “common good.” Most often, this involves land considered essential for the construction of roads, but it can include anything from creating parks, building airports or establishing conservation areas.
As a consequence of the seizure, the owner is supposed to receive “just compensation,” but ultimately, many eminent domain cases end up in court because the owner believes the government’s offer is inadequate. In short, a letter from the government indicating they intend to take your property through eminent domain is almost always an unwelcome development.
Still, throughout history, eminent domain was mostly used judiciously and applied fairly. However, as the power and influence of woke leftists grew, eminent domain became weaponized and is now routinely used in regulatory takings known as inverse condemnation, which is specifically designed to deprive the owner of the economic benefit of their land.
Eminent Domain to Seize Privately Owned Housing
The natural conclusion of leftist eminent domain law abuse inevitably leads to the concept of rental property seizure for the purpose of establishing low-cost housing. Without even researching the subject, I suspected I would find some woke local or state government attempting to pervert the intent of the law, and as usual, California didn’t disappoint.
In May 2022, in an unprecedented action, the Los Angeles City Council voted to begin the process of acquiring a privately owned apartment building in Chinatown. Tenants complained about large rent increases after a 30-year agreement to keep rents low expired. The City Council voted to spend $46 million to inspect, acquire and renovate the building.
There’s only one problem: The owner doesn’t want to sell.
In fact, the landlord, Tom Botz, has served five Section 8 tenants with eviction notices because they “have not paid rent in going on three years now.”
Frustrated with the owner exercising his right not to sell, the L.A. Housing Department has gone to court to force entry so they can begin the appraisal process. The illegal and unethical nature of the action is of no consequence to the City Council, which is made up entirely of Democrats and one Independent.
Angry tenants are demanding action, and if they don’t get it, they want the L.A. Housing Department General Manager, Ann Sewill, to resign. These people want free or greatly reduced rent, and they don’t care what it takes to get it.
So, you get one guess as to what the L.A. City Council is discussing as a solution to the problem.
That’s right. They are considering seizing the building and compensating Botz through eminent domain, even if it is a gross abuse of the “Taking Clause” in the Fifth Amendment.
The Left’s Future Blueprint for Solving the Housing Crisis
Due primarily to failed leftist policies and social experiments, America faces an unprecedented housing crisis. Domestic and foreign investors flush with cash are buying up properties at an unprecedented pace, driving out first time and middle-class home buyers. Coupled with lax drug policies, open borders and incentives not to work, woke Democrats created a nightmare of homelessness and fierce competition for rental units that has driven up rent prices to the point they are unaffordable in many metro areas.
Naturally, instead of focusing on logical and common-sense solutions to the problem, they look to government intervention because after all, isn’t more government and authoritarian control the answer to everything? Ultimately, the government has the capacity to outbid anyone for a property if they are so inclined, and if for some reason that strategy doesn’t work, the use of eminent domain can serve as a backstop for dealing with uncooperative owners.
For now, those with multi-family properties should follow these developments very closely because whenever the government gets involved in something, the value of the object of their interest ultimately declines. However, those with single family rentals and vacation homes should also take note because Woke has made it clear they want forced integration into established neighborhoods. As we know from past experience, they will use any tactic at their disposal, no matter how underhanded or unethical, to achieve their aims.